Pertamina, Indonesia's state oil monopoly, has agreed to pay $725-million for the Venezuelan assets of Harvest Natural Resources, a New York-listed energy company, in a deal that underlines the shifting global balance of power in the oil and gas sector.
Some Western companies are keen to leave Venezuela, whose socialist leader, Hugo Chávez, is pursuing a major nationalisation drive, while emerging Asian nations want to find new sources of energy beyond their traditional spheres of influence.
Chinese state companies have led the way in acquiring oil and gas in Venezuela, with Beijing lending $32-billion to Caracas in the past five years, much of which will be repaid in oil.
Japan, South Korea and Vietnam have also signed major deals with Venezuela in recent months, helping Caracas increase sales to energy-hungry Asian markets and diversify its oil exports away from the U.S., its biggest client.
With oil reserves and production dwindling in Indonesia, Pertamina said it wants to "aggressively develop its upstream business overseas".
Pertamina said in a statement on Friday that it has agreed to acquire Harvest's effective 32 per cent stake in Petrodelta, a joint venture with Venezuela's state oil company, PDVSA. Harvest said the price was $725-million and that the sale was subject to Venezuelan government approval.
Harvest and Pertamina are partners separately in a exploration block in West Sulawesi, Indonesia.
Carlos Bellorin, a London-based energy analyst at IHS, a consultancy, said the deal made sense for both sides because Harvest was a small company facing significant political risks, while Pertamina had "a lot of leverage to manage political risks at the highest level" because of its status as a state-owned company from a nonaligned nation.
Pertamina said the deal was the "entry point" for more co-operation with PDVSA. "Both Pertamina and PDVSA are national oil companies, so we have the same background, history and vision and hopefully we'll get different treatment."
Analysts said Petrodelta is a "world-class asset" with a number of oil and gas fields in production and significant development potential. Petrodelta's fields contain proven and possible reserves of 486 million barrels of oil equivalent, according to Pertamina. That is greater than Indonesia's biggest oil find of the past decade, the Cepu block, which is operated by ExxonMobil and Pertamina.
Indonesia, which is the world's 20th biggest oil producer by volume, became a net importer in 2004 because of declining production from its maturing fields and growing consumption on the back of the ongoing economic boom.
The government has called for more investment in exploration but foreign oil and gas executives say they have been deterred by constantly changing regulations and a tilt towards economic nationalism.
A survey of oil and gas companies in Indonesia last month by PwC, the accounting group, found that "contract sanctity, uncertainty over cost recovery and interference from other government agencies continue to stifle investment".